Exit and Growth Strategies for Middle Market Businesses

The fourth quarter M&A below provides you a good overview on activities in the Food and Beverage Industry Sector. M&A activity for North American based target companies in the Food and Beverage sector for Q3 2017 included 49 closed deals, according to data published by industry data tracker FactSet.

Consolidation continues in the sector as McCormick & Co, Inc. acquired the business and assets of the food division of Reckitt Benckiser Group Plc for US$4.2 billion in cash. The deal includes a 100% stake in The French’s Food Co LLC, The French’s Food Co, Inc., The RT French’s Food Co Ltd and Tiger’s Milk LLC. The acquisition strengthens McCormick & Co.’s market position. According to reports, Kraft Heinz Co and other American private equity firms were interested in acquiring the business.

With the rise in popularity of organic foods, one sub-sector that continues to grow is the gluten-free sector, which is on a strong upward trajectory.

Industry Indicators

The consumer price index for food, an indicator of food product values, rose 1.2% in September 2017 compared to the same month in 2016.

US nondurable goods manufacturers’ shipments of food products, an indicator of demand for food manufacturing, rose 5.4% year-to-date in August 2017 compared to the same period in 2016.

US retail sales for food and beverage stores, a potential measure of food demand, increased 2.2% in the first nine months of 2017 compared to the same period in 2016.

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